[DaveK]

Since it's a submerged heater and a Visitherm, It should be a sealed unit and not subject to condensation.

I would assume that it's bad or going bad, and I'd replace it right away. No point in risking the tank getting too hot or too cold due to a heater.

My personal preference would be an Eheim Jager heater, but I don't see anything wrong with the Aqueon. After I had a bad experience, I'd never get another Visitherm.